SPA of LNG contract extension to Japan ready in October

BPMIGAS, the regulatory body for upstream oil and gas operations, is upbeat that negotiations on the extension of liquefied natural gas (LNG) export contracts from Bontang LNG plant in East Kalimantan to Japan could be completed in October, this year.

Eddy Purwanto, BPMIGAS?s deputy chairman for the operation and marketing, said in Jakarta on Thursday Pertamina as the appointed seller and gas suppliers which include Total E&P Indonesie still finalizing the new sales purchase agreement (SPA) with the Japanese buyers.

?We are still working on details of the new sales purchase agreement. We hope it can be completed in October, this year,? he said.

Eddy also said that to date the buyers have not asked any revision of volume and price.

On Feb 2009, Mahakam PSC operator Total E&P Indonesie and its partner Inpex Corp. had signed Heads of Agreement (HoA) on February 13 in Osaka, Japan, for the extension of LNG sales to six Japan LNG buyers known as Western Buyers.

Under the deal, Mahakam PSC partnership through Bontang LNG plant would supply 25 million tonnes of LNG for 10 years starting 2011.

Bontang will supply 3MTPA of LNG in the first five years, of which 2 MTPA would be shipped by seller (CIF) and 1MTPA by buyers (FOB). For the next five years Bontang will supply 2MTPA, of which 1MTPA would be on CIF term and another 1MTPA on FOB. (*)